Managing Quality

Integrating the Supply Chain

S. Thomas Foster

Chapter 4
Strategic Quality Planning

2007 Pearson Ed

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Strategic Quality Planning

Chapter 4

Strategy

Content

Quality

as a strategy

importance of
time in quality
improvement

Quality

strategy

Leadership

Does

The

Quality

for quality

and ethics

process
Deploying

quality

quality lead to
better business results?
Supply

chain strategy

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Strategic Quality Planning

Strategy Content

Quality improvement involves identifying

potential areas for improvement and
planning the implementation of projects
and improvements

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Strategic Quality Planning

The importance of time in quality improvement

There are two aspects of time:

The

time it takes to achieve business goals

as a result of quality
The speed at which companies improve

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Strategic Quality Planning

The importance of time in quality improvement

When goals are set, one of three things

will occur:
1.
2.
3.

People will achieve the goals and incur

positive results
People will distort the data
People will distort the system

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Strategic Quality Planning

Leadership for quality

Leadership is the process by which a leader

influences a group to move towards the
attainment of superordinate goals.

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Strategic Quality Planning

Leadership for quality

For followers to have power, leadership must

share power. As a result leadership is
about the sharing of power.

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Strategic Quality Planning

Leadership for quality

This power takes many forms:

The power of expertise

Reward power
Coercive power
Referent power
Legitimate power

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Strategic Quality Planning

Quality and Ethics

Quality appears to be good business

Quality is also good ethics
We build good ships. At a profit if we can, at
a loss if we must. But, we build good
ships

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Strategic Quality Planning

Quality as a strategy

Cost of Quality
PAF Paradigm

Prevention Costs
Appraisal Costs

Failure Costs

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Strategic Quality Planning

Quality as a strategy

Failure Costs
Internal failure costs
External failure costs

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Strategic Quality Planning

Quality as a strategy

Differentiation through quality

Focus through quality
Quality as a core competency

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Strategic Quality Planning

Quality Strategy Process

The Forced Choice Model

1.
2.

3.

4.

Statement of the mission

Interrelated financial and nonfinancial objectives
Statement of strengths and
weaknesses
Forecast of operations

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Strategic Quality Planning

Quality Strategy Process

The Forced Choice Model

5.
6.
7.
8.

Major future operations

Broad economic Assumptions
Key government/regulatory
issues
Major technological forces

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Strategic Quality Planning

Quality Strategy Process

The Forced Choice Model

9.
10.
11.

Significant marketing
opportunities/threats
Explicit competitor strategies for
each competitor
Generating Strategic options

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Strategic Quality Planning

Deploying Quality

Hoshin Kanri or Policy Deployment

The

Company develops a 3 - 5 year

plan
The Senior Executives develop the
current years objectives.

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Strategic Quality Planning

Deploying Quality

Hoshin Kanri or Policy Deployment

Catchball occurs
The process is interactive
Teams report up
Management delivers feedback

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Strategic Quality Planning

Does Quality Lead to Better Business Results?

Quality and
Price
Cost
Productivity
Profitability
Environment
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Strategic Quality Planning

Does Quality Lead to Better Business Results?

Quality and
Price
Cost
Productivity
Profitability
Environment
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Strategic Quality Planning

Does Quality Lead to Better Business Results?

Quality and
Price
Cost
Productivity
Profitability
Environment
2007 Pearson Ed

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Strategic Quality Planning

Does Quality Lead to Better Business Results?

Quality and
Price
Cost
Productivity
Profitability
Environment
2007 Pearson Ed

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Strategic Quality Planning

Does Quality Lead to Better Business Results?

Quality and
Price
Cost
Productivity
Profitability
Environment
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Strategic Quality Planning

Supply Chain Strategy

Logistics?
When shall we ship?
What mode of transportation shall we
use?
How do we optimize our shipping
practices?

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Strategic Quality Planning

Supply Chain Strategy

Suppliers?
Who

are our preferred suppliers?

What is our process for supplier selection?
How do we develop suppliers?
How do we link with our suppliers?
Do we source globally?

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Strategic Quality Planning

Supply Chain Strategy

Inventory management?
Where

do we optimally store inventory

How much? How long?
Do we have perishable stock?
Do we carry safety stock?
ARE we maintaining good levels of service?

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Strategic Quality Planning

Supply Chain Strategy

Products?
How

much product do we stock?

What product variety is necessary?
How do we win orders?
Where are our products in their life cycles?

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Strategic Quality Planning

Supply Chain Strategy

Service?
How

do we define service along the supply

chain?
What do our customers want?
can we segment the supply chain?
Who are our customers?

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